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The small Arizona business audit that audits Donald Trump’s media company was kicked out of the National Accounting Alliance for taking on the job for him, the lawsuit alleges.
Phoenix-based Semple Marchal & Cooper intervened as an auditor for Trump’s social media business in May after it was shut down after its former accounting firm ran a regulator called “massive fraud.”
According to a lawsuit filed by Semple against the BDO executive responsible for partnership with BDO Alliance USA, the new client quickly sparked tensions in accounting giant BDO.
BDO, the sixth-largest US accountant firm by revenue, said it would end its Semple alliance membership unless it drops Trump Media & Technology Group as a client, the lawsuit alleges. As of June 30, 2024, the relationship has ended.
When asked why BDO was angry about SM&C’s winning TMTG as a client, BDO executive Michael Horwitz cried out, “Because he (the main shareholder) is a criminal.”
At the time of Semple’s appointment, Trump was accused of being accused of forging business records in New York in connection with paying quiet money to porn actor Stormy Daniels. He was ultimately convicted. His main business, the Trump organization, had been convicted of fraud in an unrelated civil lawsuit.
Trump owns a majority stake in TMTG. TMTG runs the social media platform Truth Social, which has been difficult to remain an auditor. According to the Financial Times, the first pick, Witum, left less than a year after deciding that he didn’t want to be associated with a Trump business venture.
BF Borgers, a small Colorado company that made TMTG a client after Witum resigned, has been closed by the Securities and Exchange Commission to commit “large fraud” on people who used the services and investor countries, as it does little to verify the client’s financial statements, the SEC said.
TMTG is only a handful of public companies audited by SM&C, significantly larger than the single public companies listed as clients in early 2024. The company has 32 staff, according to regulatory filings, including two accountants.
TMTG listed on Nasdaq has a market capitalization of over $5 billion.
BDO has over 300 US accounting firms in the Alliance, awarding practical support, business referrals and marketing benefits for small, unreachable companies in the country.
“Although members are independent companies responsible for their own professional decision-making, BDO Alliance USA is rarely used to break the relationship if quality or other issues exist.
The SM&C allegations were “frivolous and not based on the reality of why BDO Alliance USA chose to exercise its right to cut off its ties.”
SM&C founder Robert Semple said his company “has not commented on the complaints as it is self-evident.” He added: “BDO comments are not true and are defamatory and will be addressed with revised complaints.”
The SM&C lawsuit alleges that BDO is “engaged in fraud by making dishonest claims.” It argues that BDO’s political views “compromising independence” by allowing SM&C’s role as an auditor for publicly available companies.
The termination from the alliance led to the false meaning of engaging in fraud, saying that it was “forced to rework all materials and documents and retrain employees at a significant financial cost.”
TMTG did not respond to requests for comment.
